Hair and Beauty Salon Sample Business Plan

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Trend Setters Hair Studio

Table of Contents

Executive Summary ...... 1 Introduction ...... 1 Chart: Highlights ...... 2 Keys to Success...... 2

Company Summary ...... 3 Start-up Summary ...... 3 Table: Start-up ...... 3 Table: Start-up Funding ...... 4 Chart: Start-up ...... 5

Products and Services ...... 2 Hair ...... 2 Nails ...... 2 Skin Care ...... 2

Strategy and Implementation Summary ...... 2 Competitive Edge...... 2 Marketing Strategy...... 3 Sales Forecast...... 3 Table: Sales Forecast ...... 4 Chart: Sales Monthly ...... 4 Chart: Sales by Year ...... 5 Milestones ...... 6 Table: Milestones ...... 6 Chart: Milestones...... 7

Management Summary ...... 8 Personnel Plan ...... 8

CONFIDENTIAL - DO NOT DISSEMINATE. This business plan contains confidential, trade-secret information and is shared only with the understanding that you will not share its contents or ideas with third parties without the express written consent of the plan author. Trend Setters Hair Studio

Table: Personnel ...... 8

Financial Plan ...... 9 Important Assumptions ...... 9 Table: General Assumptions ...... 9 Projected Cash Flow ...... 10 Chart: Cash ...... 10 Table: Cash Flow ...... 11 Break-even Analysis ...... 12 Chart: Break-even Analysis ...... 12 Table: Break-even Analysis ...... 12 Projected Profit and Loss ...... 13 Chart: Gross Margin Monthly ...... 13 Chart: Gross Margin Yearly ...... 14 Table: Profit and Loss ...... 15 Chart: Profit Monthly ...... 16 Chart: Profit Yearly ...... 16 Balance Sheet ...... 17 Table: Balance Sheet ...... 17 Business Ratios ...... 18 Table: Ratios ...... 18

Appendix ...... i Sales Forecast (With Monthly Detail) ...... i Personnel (With Monthly Details) ...... ii Profit and Loss Statement (With Monthly Detail) ...... iii Cash Flow Statement (With Monthly Detail) ...... iv Balance Sheet (With Monthly Detail)...... v

Executive Summary Introduction

Trend Setters is a full-service beauty salon dedicated to consistently providing high customer satisfaction by rendering excellent service, quality products, and furnishing an enjoyable atmosphere at an acceptable price/value relationship. We will also maintain a friendly, fair, and creative work environment, which respects diversity, ideas, and hard work.

Our Mission: To supply services and products that enhance our clients' physical appearance and mental relaxation.

Our Motto: "The Trend Begins Here!"

The timing is right for starting this new venture. Patiently searching for six months for the perfect location, one was finally found. The demand from the owner's clients, as well as the ambitions of the owner to one day start her own salon, and the procurement of highly professional and qualified beauticians to support the salon, has made this business one of great potential.

Curley Comb, co-owner with Roller Comb, Jr., her husband, has worked in a prestigious, upscale salon in MyTown, Texas for the past two years. Curley has created a large client following through hard work and dedication. Curley, and her talented team of beauticians, has what it takes to make this venture an extremely successful one. We expect our growing reputation to lead to new clients and beauticians to support our anticipated growth.

To achieve our objectives, Trend Setters is seeking additional loan financing. This loan will be paid from the cash flow from the business, and will be collateralized by the assets of the company, and backed by the character, experience, and personal guarantees of the owners.

Chart: Highlights

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The keys to success in our business are:

• Location: providing an easily accessible location for customers. • Environment: providing an environment conducive to giving relaxing and professional service. • Convenience: offering clients a wide range of services in one setting, and extended business hours. • Reputation: reputation of the owner and other "beauticians" as providing superior personal service.

Company Summary

Trend Setters will, upon commencement of operations, sell a wide range of beauty services and products. We will provide quality hair, nail, and skin services, along with top lines of beauty products. What will set Trend Setters apart from the competition is our commitment to providing all of these services in one convenient location.

The salon will be located in a retail strip mall at 1234 Stylish Road, MyTown. The salon will utilize 1,540 square feet. The location is strategically situated on one of the busiest streets in MyTown. It is a high profile area, with easy access from all parts of town. Start-up Summary

After spending several months searching for a salon to purchase, the owners decided to start a salon from the ground up. The start-up capital will be used for the design, leasehold improvements, and equipment of the salon.

Leasehold improvements will amount to approximately $32,500, and salon equipment will cost about $27,000. The owner will invest $500 for cash-on-hand at starting date.

Table: Start-up

Start-up

Requirements

Start-up Expenses Rent deposit $1,817 Other $0 Total Start-up Expenses $1,817

Start-up Assets Cash Required $500 Other Current Assets $600 Long-term Assets $59,500 Total Assets $60,600

Total Requirements $62,417

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Table: Start-up Funding

Start-up Funding Start-up Expenses to Fund $1,817 Start-up Assets to Fund $60,600 Total Funding Required $62,417

Assets Non-cash Assets from Start-up $60,100 Cash Requirements from Start-up $500 Additional Cash Raised $0 Cash Balance on Starting Date $500 Total Assets $60,600

Liabilities and Capital

Liabilities Current Borrowing $0 Long-term Liabilities $61,917 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $61,917

Capital

Planned Investment Owner $500 Investor $0 Additional Investment Requirement $0 Total Planned Investment $500

Loss at Start-up (Start-up Expenses) ($1,817) Total Capital ($1,317)

Total Capital and Liabilities $60,600

Total Funding $62,417

Chart: Start-up

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Trend Setters Hair Studio

Products and Services

Trend Setters is considered an upscale full-service beauty salon. We will offer a wide range of services that include:

Hair • Cuts • Relaxers • Perms • Colors • Shampoo • Conditioning • Curling • Reconstructing • Weaving • waving.

Nails • Manicures • Pedicures • Polish • Sculptured nails

Skin Care • European facials • Body waxing • Massage Strategy and Implementation Summary

Skill at what we do, good customer service, and creating a pleasant environment for our customers will be important to implementing our business plan. Competitive Edge

Trend Setters wants to set itself apart from other beauty salons that may offer only one or two types of services. Having come from such a salon, Curley has realized, from talking with her clients, that they desire all of the services that we are proposing, but they remain frustrated because they must get their hair done at one place, and nails done at another. Although the focus

of Trend Setters is hair services, we do wish to offer our clients the convenience of these other services in one location.

There are a number of salons like ours, but they are mainly in the very high income parts of MyTown and surrounding areas. We do not intend to compete with these so called "Day Spas." We wish to offer a middle ground for those clients who can't quite afford those high-end luxury salons.

Our business atmosphere will be a relaxing one where clients can kick back and be pampered. Soft drinks will be offered to clients as they enter for service. Televisions will be located in the waiting and hair-drying area. Marketing Strategy

Our marketing strategy is a simple one: satisfied clients are our best marketing tool. When a client leaves our business with a new look, he or she is broadcasting our name and quality to the public. Most of our clients will be referrals from existing clients.

No major advertising campaigns are anticipated. Our research has shown that word of mouth is the best advertising for this type of business. We will, however, run specials throughout the week. We will also ask clients for referrals, and reward them with discounted or free services depending on the number of clients they bring. We will also offer discounts to the new clients who have been referred. There are plans for a lottery that will offer a free trip to, say, Cancun. A client would simply refer new clients to us, and we will place a card in a box for each client he or she brings. The more they bring, the more chances they have of winning the trip. Sales Forecast

We anticipate the highest peak on the months of November and December in our sales forecast, due to the holiday seasons. In November, there is Ramadan, and for non-muslim Malaysians and Indonesians, it means vacation time. Approximately 1.5 million Indonesians visit Singapore each year, mostly for shopping and dining. Then in December, we anticipate more tourists coming into Singapore; this explains the jumped of sales in these last two months of the year.

Table: Sales Forecast

Sales Forecast Year 1 Year 2 Year 3

Sales Owner $49,600 $57,040 $65,696 Stylist #1 $49,600 $57,040 $65,596 Barber #1 $16,800 $19,320 $22,218 Stylist #2 $22,800 $25,622 $29,465 Stylist #3 $0 $22,000 $24,000 Nails and massage $18,000 $20,000 $22,000 Product sales $9,600 $10,000 $11,000 Total Sales $166,400 $211,022 $239,975

Direct Cost of Sales Year 1 Year 2 Year 3 Product Costs $4,320 $4,300 $4,400 Other $0 $0 $0 Subtotal Direct Cost of Sales $4,320 $4,300 $4,400

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Chart: Sales Monthly

Chart: Sales by Year

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Milestones

The milestones table and chart show the specific detail about actual program activities that should be taking place during the year. Each one has its manager, starting date, ending date, and budget. During the year we will be keeping track of implementation against plan, with reports on the timely completion of these activities as planned.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Sample Milestones 1/4/2008 1/4/2008 $0 ABC Department Finish Business Plan 9/3/2010 10/3/2010 $100 Dude Boss Acquire Financing 9/13/2010 11/2/2010 $200 Dudette Legumers Ah HA! Event 9/23/2010 9/28/2010 $60 Marianne Bosses Ah Merde Alors! Event 10/23/2010 10/28/2010 $250 Marionette Bouc émissaire Grand Opening 11/2/2010 11/7/2010 $500 Gloworm Nobs Marketing Program Starts 10/3/2010 10/28/2010 $1,000 Glower Marketeers Plan vs. Actual Review 2/28/2011 3/7/2011 $0 Galore Alles First Break-even Month 7/2/2011 8/1/2011 $0 Bouys Salers Hire Employees 5/31/2011 6/30/2011 $150 Gulls HRM Upgrade Business Plan Pro 8/19/2011 8/21/2011 $100 Brass Bossies Totals $2,360

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Chart: Milestones

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Management Summary

Trend Setters will be organized and managed in a creative and innovative fashion to generate very high levels of customer satisfaction, and to create a working climate conducive to a high degree of personal development and economic satisfaction for employees.

Training classes to help improve employee product knowledge and skills will be conducted on a regular basis. As the business grows, the company will consider offering an employee benefit package to include health and vacation benefits for everyone. Personnel Plan

The personnel plan calls for a receptionist who will greet customers and receive payments for services and products. There will be five hair stylists, one barber, one nail technician, one facialist, and a massage therapist. Everyone but the receptionist will be contract workers, and will be paid a sliding commission scale based on the amount of revenue created. Future plans include the hiring of a shampoo technician as the business expands.

In the first year, assumptions are that there will only be three hair stylists, a barber, and part time nail, facial, and massage technician until the business can build a reputation that will attract others to work there.

Table: Personnel

Personnel Plan

Year 1 Year 2 Year 3 Owner (Stylist) $24,000 $25,000 $26,000 Receptionist $14,400 $15,120 $15,876 Shampoo Tech $8,000 $12,400 $13,000 Total People 3 3 3

Total Payroll $46,400 $52,520 $54,876

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Financial Plan

Our goal is to be a profitable business beginning in the first month. The business will not have to wait long for clients to learn about it since the stylists will already have an existing client base.

To assure the start-up funds lender that the owners are financially stable, a personal financial statement is enclosed illustrating other sources of income that include interest and dividend income from investments ($2,840), salary income ($29,658), and commission income ($15,000). Important Assumptions

The financials that are enclosed have a number of assumptions:

Revenues will grow at an annual rate of 15%, increasing 20% in November and December due to a historical jump in revenues at this time of year. We anticipate this increase to stay steady throughout the following year to account for the normal flow of new clients coming into the salon. Estimates for sales revenue and growth are intentionally low, while anticipated expenses are exaggerated to the high side to illustrate a worst case scenario.

We did not use cost of goods sold in our calculations of net service sales, but included all related recurring expenses, such as payroll and supplies, in the operating expenses area of the profit and loss table. The only direct costs in the sales forecast are for projected product sales.

Product sales are a minimal part of our market. We are not quite sure how much revenue will be derived from products, so we took a low-ball approach and estimated sales of $800 a month. Also in the sales projections table are services such as nails and massages. We are not quite sure how much revenue these two services will generate. We are certain that in time these services will be a large part of our revenue, but to err on the conservative side, we estimate revenues from these services to be only $1,500 a month for the first year.

Table: General Assumptions

General Assumptions

Year 1 Year 2 Year 3 Plan Month 1 2 3 Current Interest Rate 10% 10% 10% Long-Term Interest Rate 10% 10% 10% Tax Rate 30% 30% 30% Other 0 0 0

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We expect to manage cash flow over the next three years simply by the growth of the cash flow of the business. The business will generate more than enough cash flow to cover all of its expenses.

Chart: Cash

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Table: Cash Flow

Pro Forma Cash Flow Year 1 Year 2 Year 3 Cash Received

Cash from Operations Cash Sales $166,400 $211,022 $239,975 Subtotal Cash from Operations $166,400 $211,022 $239,975

Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $166,400 $211,022 $239,975

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations Cash Spending $46,400 $52,520 $54,876 Bill Payments $99,540 $128,730 $147,285 Subtotal Spent on Operations $145,940 $181,250 $202,161

Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current $0 $0 $0 Borrowing Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal $12,000 $12,000 $12,000 Repayment Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $157,940 $193,250 $214,161

Net Cash Flow $8,460 $17,772 $25,814 Cash Balance $8,960 $26,733 $52,547

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Break-even Analysis

The break-even analysis shows that Trend Setters has a good balance of fixed costs and sufficient sales strength to remain healthy. This calculation is focused on service sales, and excludes costs related to product sales. Our conservative forecast shows the salon just passing the break-even point throughout most of the first year, but we expect actual sales to be higher.

Chart: Break-even Analysis

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Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $12,995

Assumptions: Average Percent Variable Cost 3% Estimated Monthly Fixed Cost $12,657

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The following table shows our very conservative profit and loss projections for the next three years. The table includes the payments for all independently contracted stylists and technicians, as well for all regularly occurring supply expenses associated with service sales.

Chart: Gross Margin Monthly

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Chart: Gross Margin Yearly

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Table: Profit and Loss

Pro Forma Profit and Loss Year 1 Year 2 Year 3 Sales $166,400 $211,022 $239,975 Direct Cost of Sales $4,320 $4,300 $4,400 Other Costs of Sales $0 $0 $0 Total Cost of Sales $4,320 $4,300 $4,400

Gross Margin $162,080 $206,722 $235,575 Gross Margin % 97.40% 97.96% 98.17%

Expenses Payroll $46,400 $52,520 $54,876 Marketing/Promotion $22,800 $24,000 $26,000 Depreciation $8,146 $8,146 $8,146 Rent $22,740 $22,740 $22,740 Utilities $4,200 $4,200 $4,200 Insurance $1,200 $1,200 $1,200 Payroll Taxes $0 $0 $0 Independently contracted stylists $40,400 $55,000 $69,000 Supplies $6,000 $6,000 $6,000 Other $0 $0 $0

Total Operating Expenses $151,886 $173,806 $192,162

Profit Before Interest and Taxes $10,194 $32,916 $43,413 EBITDA $18,340 $41,062 $51,559 Interest Expense $5,542 $4,392 $3,192 Taxes Incurred $1,396 $8,557 $12,066

Net Profit $3,257 $19,967 $28,155 Net Profit/Sales 1.96% 9.46% 11.73%

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Chart: Profit Monthly

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Chart: Profit Yearly

Balance Sheet

As shown in the balance sheet, we expect a healthy growth in net worth.

Table: Balance Sheet

Pro Forma Balance Sheet Year 1 Year 2 Year 3 Assets

Current Assets Cash $8,960 $26,733 $52,547 Other Current Assets $600 $600 $600 Total Current Assets $9,560 $27,333 $53,147

Long-term Assets Long-term Assets $59,500 $59,500 $59,500 Accumulated Depreciation $8,146 $16,292 $24,438 Total Long-term Assets $51,354 $43,208 $35,062 Total Assets $60,914 $70,541 $88,209

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities Accounts Payable $9,057 $10,717 $12,230 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $9,057 $10,717 $12,230

Long-term Liabilities $49,917 $37,917 $25,917 Total Liabilities $58,974 $48,634 $38,147

Paid-in Capital $500 $500 $500 Retained Earnings ($1,817) $1,440 $21,407 Earnings $3,257 $19,967 $28,155 Total Capital $1,940 $21,907 $50,062 Total Liabilities and Capital $60,914 $70,541 $88,209

Net Worth $1,940 $21,907 $50,062

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Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) Index code 7231, Beauty Shops, are shown for comparison.

Table: Ratios

Ratio Analysis Year 1 Year 2 Year 3 Industry Profile Sales Growth n.a. 26.82% 13.72% 7.35%

Percent of Total Assets Other Current Assets 0.98% 0.85% 0.68% 50.11% Total Current Assets 15.69% 38.75% 60.25% 64.74% Long-term Assets 84.31% 61.25% 39.75% 35.26% Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 14.87% 15.19% 13.86% 21.71% Long-term Liabilities 81.95% 53.75% 29.38% 25.39% Total Liabilities 96.82% 68.94% 43.25% 47.10% Net Worth 3.18% 31.06% 56.75% 52.90%

Percent of Sales Sales 100.00% 100.00% 100.00% 100.00% Gross Margin 97.40% 97.96% 98.17% 100.00% Selling, General & 95.45% 88.50% 86.43% 67.01% Administrative Expenses Advertising Expenses 4.90% 3.86% 3.39% 2.18% Profit Before Interest and Taxes 6.13% 15.60% 18.09% 4.59%

Main Ratios Current 1.06 2.55 4.35 1.97 Quick 1.06 2.55 4.35 1.46 Total Debt to Total Assets 96.82% 68.94% 43.25% 53.38% Pre-tax Return on Net Worth 239.86% 130.21% 80.34% 8.92% Pre-tax Return on Assets 7.64% 40.44% 45.60% 19.14%

Additional Ratios Year 1 Year 2 Year 3 Net Profit Margin 1.96% 9.46% 11.73% n.a Return on Equity 167.90% 91.15% 56.24% n.a

Activity Ratios Accounts Payable Turnover 11.99 12.17 12.17 n.a Payment Days 27 28 28 n.a

Total Asset Turnover 2.73 2.99 2.72 n.a

Debt Ratios Debt to Net Worth 30.41 2.22 0.76 n.a Current Liab. to Liab. 0.15 0.22 0.32 n.a

Liquidity Ratios Net Working Capital $503 $16,616 $40,917 n.a Interest Coverage 1.84 7.50 13.60 n.a

Additional Ratios Assets to Sales 0.37 0.33 0.37 n.a Current Debt/Total Assets 15% 15% 14% n.a Acid Test 1.06 2.55 4.35 n.a Sales/Net Worth 85.79 9.63 4.79 n.a Dividend Payout 0.00 0.00 0.00 n.a

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Appendix Sales Forecast (With Monthly Detail)

Sales Forecast Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Sales Owner 0% $3,600 $3,600 $3,600 $3,600 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 Stylist #1 0% $3,600 $3,600 $3,600 $3,600 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 Barber #1 0% $1,200 $1,200 $1,200 $1,200 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Stylist #2 0% $1,700 $1,700 $1,700 $1,700 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Stylist #3 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Nails and massage 0% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Product sales 0% $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 Total Sales $12,400 $12,400 $12,400 $12,400 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Product Costs $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Direct Cost $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 of Sales

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Personnel (With Monthly Details)

Personnel Plan

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Owner (Stylist) 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Receptionist 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Shampoo Tech 0% $0 $0 $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Total People 2 2 2 2 3 3 3 3 3 3 3 3

Total Payroll $3,200 $3,200 $3,200 $3,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200

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Profit and Loss Statement (With Monthly Detail)

Pro Forma Profit and Loss Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Sales $12,400 $12,400 $12,400 $12,400 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 Direct Cost of Sales $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cost of Sales $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360

Gross Margin $12,040 $12,040 $12,040 $12,040 $14,240 $14,240 $14,240 $14,240 $14,240 $14,240 $14,240 $14,240 Gross Margin % 97.10% 97.10% 97.10% 97.10% 97.53% 97.53% 97.53% 97.53% 97.53% 97.53% 97.53% 97.53%

Expenses Payroll $3,200 $3,200 $3,200 $3,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 Marketing/Promotion $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 $1,900 Depreciation $633 $683 $683 $683 $683 $683 $683 $683 $683 $683 $683 $683 Rent $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 Utilities $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Independently $2,700 $2,700 $2,700 $2,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 contracted stylists Supplies 15% $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating $11,278 $11,328 $11,328 $11,328 $13,328 $13,328 $13,328 $13,328 $13,328 $13,328 $13,328 $13,328 Expenses

Profit Before Interest $762 $712 $712 $712 $912 $912 $912 $912 $912 $912 $912 $912 and Taxes EBITDA $1,395 $1,395 $1,395 $1,395 $1,595 $1,595 $1,595 $1,595 $1,595 $1,595 $1,595 $1,595 Interest Expense $508 $499 $491 $483 $474 $466 $458 $449 $441 $433 $424 $416 Taxes Incurred $76 $64 $66 $69 $131 $134 $136 $139 $141 $144 $146 $149

Net Profit $178 $149 $155 $161 $306 $312 $318 $324 $330 $336 $341 $347 Net Profit/Sales 1.44% 1.20% 1.25% 1.29% 2.10% 2.14% 2.18% 2.22% 2.26% 2.30% 2.34% 2.38%

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Cash Flow Statement (With Monthly Detail)

Pro Forma Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Cash Received

Cash from Operations

Cash Sales $12,400 $12,400 $12,400 $12,400 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 Subtotal Cash from Operations $12,400 $12,400 $12,400 $12,400 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600

Additional Cash Received Sales Tax, VAT, HST/GST 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Received New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Other Liabilities (interest- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 free) New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Received $12,400 $12,400 $12,400 $12,400 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600 $14,600

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations Cash Spending $3,200 $3,200 $3,200 $3,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 Bill Payments $280 $8,388 $8,368 $8,362 $8,392 $9,410 $9,405 $9,399 $9,393 $9,387 $9,381 $9,375 Subtotal Spent on Operations $3,480 $11,588 $11,568 $11,562 $12,592 $13,610 $13,605 $13,599 $13,593 $13,587 $13,581 $13,575

Additional Cash Spent Sales Tax, VAT, HST/GST Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Out Principal Repayment of Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Borrowing Other Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Repayment Long-term Liabilities Principal $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Repayment Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Spent $4,480 $12,588 $12,568 $12,562 $13,592 $14,610 $14,605 $14,599 $14,593 $14,587 $14,581 $14,575

Net Cash Flow $7,920 ($188) ($168) ($162) $1,008 ($10) ($5) $1 $7 $13 $19 $25

Cash Balance $8,420 $8,232 $8,064 $7,902 $8,911 $8,900 $8,896 $8,897 $8,904 $8,917 $8,935 $8,960

Balance Sheet (With Monthly Detail)

Pro Forma Balance Sheet Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Assets Starting Balances

Current Assets Cash $500 $8,420 $8,232 $8,064 $7,902 $8,911 $8,900 $8,896 $8,897 $8,904 $8,917 $8,935 $8,960 Other Current Assets $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 Total Current Assets $1,100 $9,020 $8,832 $8,664 $8,502 $9,511 $9,500 $9,496 $9,497 $9,504 $9,517 $9,535 $9,560

Long-term Assets Long-term Assets $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 Accumulated Depreciation $0 $633 $1,316 $1,999 $2,682 $3,365 $4,048 $4,731 $5,414 $6,097 $6,780 $7,463 $8,146 Total Long-term Assets $59,500 $58,867 $58,184 $57,501 $56,818 $56,135 $55,452 $54,769 $54,086 $53,403 $52,720 $52,037 $51,354 Total Assets $60,600 $67,887 $67,016 $66,165 $65,320 $65,646 $64,952 $64,265 $63,583 $62,907 $62,237 $61,572 $60,914

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities Accounts Payable $0 $8,109 $8,089 $8,084 $8,078 $9,097 $9,091 $9,086 $9,080 $9,074 $9,069 $9,063 $9,057 Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Current Liabilities $0 $8,109 $8,089 $8,084 $8,078 $9,097 $9,091 $9,086 $9,080 $9,074 $9,069 $9,063 $9,057

Long-term Liabilities $61,917 $60,917 $59,917 $58,917 $57,917 $56,917 $55,917 $54,917 $53,917 $52,917 $51,917 $50,917 $49,917 Total Liabilities $61,917 $69,026 $68,006 $67,001 $65,995 $66,014 $65,008 $64,003 $62,997 $61,991 $60,986 $59,980 $58,974

Paid-in Capital $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 Retained Earnings ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) ($1,817) Earnings $0 $178 $327 $482 $642 $949 $1,261 $1,579 $1,903 $2,232 $2,568 $2,909 $3,257 Total Capital ($1,317) ($1,139) ($990) ($835) ($675) ($368) ($56) $262 $586 $915 $1,251 $1,592 $1,940 Total Liabilities and Capital $60,600 $67,887 $67,016 $66,165 $65,320 $65,646 $64,952 $64,265 $63,583 $62,907 $62,237 $61,572 $60,914

Net Worth ($1,317) ($1,139) ($990) ($835) ($675) ($368) ($56) $262 $586 $915 $1,251 $1,592 $1,940

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